© Katarzyna Bialasiewicz/Dreamstime
Manufacturing Employee Working © Katarzyna Bialasiewicz Dreamstime

Job Growth in Manufacturing, Private Economy Slows in December

Jan. 7, 2022
Gap between pre-pandemic and current manufacturing employment persists despite historically low unemployment rate.

Jobs growth in manufacturing slowed again in December as the overall economy made modest gains across the board, leading to the lowest pandemic-era unemployment rate on record. Total nonfarm employment rose by 199,000 in December while the manufacturing sector added 26,000 new hires. The unemployment rate fell to 3.9%, the lowest it’s been since January and February 2020, which may bode poorly for companies still hungry for talent.

Despite steady gains, manufacturing employment is still substantially below where it was before the pandemic: the Department of Labor notes that manufacturing companies employ 219,000 fewer people today than it did in February 2020.

The Department of Labor’s December 2020 employment situation report found that 20,000 of the 26,000 new manufacturing jobs were in durable goods production. The durable-goods category with the largest gains, machinery, saw 7,700 new jobs in December, which the Bureau of Labor Statistics noted “reflected the return of workers from a strike.” The UAW’s strike of Deere & Co. factories included more than 10,000 workers and ended November 17. Motor vehicles and parts production, the next-best manufacturing sector for new hires, added about 4,200 new jobs.

Nondurable goods production made up the remaining 6,000 of new manufacturing jobs with gains of more than 2,000 new hires in the chemicals and petroleum industries.

The job-seekers market has led employers to increase wages substantially, but the latest government data shows that manufacturing wages are rising slower than the rest. Average hourly earnings for all employees on nonfarm private payrolls rose 19 cents last month to $31.31, while the average hourly earnings in manufacturing rose about 7 cents to $31.28 an hour. The average durable-goods production wage rose 7 cents to $31.82, while the average wage in nondurable production rose only 6 cents to $27.70.

Earlier this week, private payroll management firm ADP released their own jobs report, which reported almost twice as many new private hires. Their January 5 private payroll report showed 50,000 new manufacturing jobs in December, about one-tenth of the 534,000 new private employment jobs seen by the ADP and almost twice as many reported by the Department of Labor.

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